Choices, situations, and happiness

B Köszegi, M Rabin

    Research output: Contribution to journalArticlepeer-review

    Abstract (may include machine translation)

    This article explores some conceptual issues in the study of well-being using the traditional economic approach of inferring preferences solely from choice behavior. We argue that choice behavior alone can never reveal which situations make people better off, even with unlimited data and under the maintained hypothesis of 100% rational choice. Ancillary assumptions or additional forms of data such as happiness measures are always needed. With such ancillary assumptions and additional data, however, the use of revealed preference to study well-being can be significantly improved, so that the choices people make can jointly identify preferences, mistakes, and well-being.
    Original languageAmerican English
    Pages (from-to)1821-1832
    Number of pages12
    JournalJournal of Public Economics
    Volume92
    Issue number8-9
    DOIs
    StatePublished - Aug 2008

    Keywords

    • Happiness
    • Revealed preference

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